Value-Based Payments: Insights from the Health Care Transformation - - PowerPoint PPT Presentation

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Value-Based Payments: Insights from the Health Care Transformation Task Force

Health Management Academy CEO Forum March 26, 2015

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1

Source: Brookings Institute, Evolent.

CMS is committed to value-based care, targeting >50%

• f payments in alternative models by 2018

Linked to Quality / Value (eg P4P adjustments) Traditional FFS Alternative Payment Models (eg ACOs)

15% 10% 55% 40% 30% 50% 2016 2018

As a very large payer in the system, we believe we have a responsibility to

• lead. For the first time, we’re going to

set clear goals and establish a clear timeline for moving from volume to value in the Medicare system.

“ “

HHS Secretary Burwell January 26, 2015

“Obama administration wants to dramatically change how doctors are paid” January 26, 2015

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2

HHS/CMS have launched a suite of programs and care improvement initiatives to achieve value payment goals

Medicare Advantage Shared Risk ACO Shared Savings ACO Medical Homes: Advanced Medical Homes: Basic Multi-Site Bundling Single-Site Bundling Programs to Facilitate Care Improvement Data sharing; Waivers; Learning collaborative; Consumer incentives

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3

The Task Force is a partnership aimed at accelerating system transformation to value-based care

Providers Purchasers Payers Patient Organizations Partners

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4

The Task Force’s guiding principles outline a financially and operationally viable and sustainable approach

Shift 75% of our respective businesses to be under value-based care contracts by 2020 Design programs that provide reasonable returns to deliver the triple aim of better health, better care and reduced total cost of care at or below GDP growth Equip market players with all tools necessary to compete in new market focused

• n people-centered primary care

Encourage multi-payer participation and alignment to create common targets, metrics, and incentives Foster transparency of quality and cost metrics in a manner that is accessible to, and easily understood by, consumers Support the needs of disadvantaged populations and help strengthen the safety net providers who serve them Share cost savings with patients, payers, and providers to ensure adequate investment in new care models

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5

Task Force has sent strong private-sector market signal about desired pace and depth of health system change

“Major providers, insurers plan aggressive push to new payment models” “Industry Group to Back Results-Focused Care” “Stakeholders Set Sights On Transformed Health Care System”

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6

TF Work Groups are driving rapid-cycle product development, starting with improving the ACO model

Create, test and recommend a delivery/payment model that allows a wide range of provider

• rganizations, including in rural areas with little to no current MA/ACO penetration, to engage

in population health by starting with highest-cost patients (top 5%).

New Model Development - Improving Care for High-cost Patients

Create detailed principles and tools to align and evaluate episode definitions/pricing for public/private payer bundled payment programs.

Develop Common Bundled Payment Framework

Develop aligned public-private action-steps and recommendations to improve the design and implementation of the ACO model

Improve the ACO Model

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Achieving the 75% target by 2020 will fundamentally alter the terms of competition for provider systems

Capture access to patients and market share through ability to manage total cost of care and customer experience

1

Create a high-performing physician network needed to deliver better care and increase in-system utilization

2

Manage a greater share of premium dollar

3

Maximize accuracy and usefulness of data to improve care management and ensure appropriate risk-adjustment

4 5

Invest in community health

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8

Foundational capabilities needed to support transformation and succeed in new competitive landscape

Leadership and Governance

CEO Commitment to making visible decisions that favor population health agenda when volume and value agendas conflict Dedicated Value-based Organization Model to help integrate and optimize population health programs, and align and focus execution

Strategy

Delegated Risk at Scale to allow providers to intervene in the immediate, toward effective and efficient care Physician Alignment to drive clinical results through new clinical workflows that enable physicians to get better results and reduce administrative burden

Operations Model

Structured Care Management Capabilities to focus specifically on building and delivering a new people-centered approach to care Administrative and Technology Platform to integrate data, apply sophisticated rules to drive interventions, and facilitate care management

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9

Medicare ACOs offer unique financial and operational

• pportunities while adding significant lives to platform

Financial Value

✓

Strong value returns given high shared savings rate

Access to Waivers and Data

✓

Insulation from regulatory risk and freedom to engage in creative new initiatives through waivers; access to valuable data

Physician and Patient Alignment

✓

Increase alignment with independent physicians; Drive brand affiliation with Medicare patients

Support Mission

✓

Grow Value-Based Business and broaden community impact; Drive national brand value through high-profile program

Platform Scale & Pop Health Performance

✓

Achieve meaningful physician mindshare and “lives on platform” to drive pop health performance across LOBs

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10

Modeling a business case helps understand all of the drivers impacting financial opportunity

• Lives under

management, driven by breadth of network and proposed payer partners

• Value created

through clinical program impact and coding improvement

• Performance

payments for participating physicians

• Impact to

health system margin from integrating care

• Incremental

infrastructure and variable costs to support the payer partnership

• Portion of

value created that belongs to the payer based on partnership terms

• Lost health

system margin due to clinical program impact

Definition

Population Health Returns Shared Savings In-System Utilization Impact Admin Support Staff Costs Impact on Operating Income

X =

Membership Build Physician Quality Incentives

− + −

Reduction in FFS from Population Health

− −

Value Based Business P&L Revenues and expenses related to the direct operation of an independent VBB Facility Impact Summary Gains / Losses to the traditional health system business related to market consequences of a VBB

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11

If ACO can secure clinical savings and modest RAF improvement, Next Gen returns more value than Track 3

Track 1 Track 3 Next Gen

Assumptions • 90% quality

• 30K lives (= 2.3% corridor)
• 90% quality
• 2.5% discount
• 3% RAF improvement

Clinical Savings (% PMPM) 10% 4.5% 6.8% 10.5% 8% 3.6% 5.4% 8.5% 6% 2.7% 4.1% 6.5% 4% 1.8% 2.7% 4.5% 2%

• 1.4%

2.5% 0%

• 0.5%
• 2%
• 0.8%
• 1.5%
• 4%
• 1.6%
• 3.5%
• 6%
• 2.4%
• 5.5%
• 8%
• 3.2%
• 7.5%
• 10%
• 4.0%
• 9.5%

Revenue to Provider under Medicare ACO Models (% PMPM)

Saved vs Benchmark Exceeded Benchmark